Department Of Education Report Cancels Student Aid, Confirms Foul Play At Webster University Campus

As was expected by several Webster University : London students earlier this year, a report released by the U.S. Department of Education in June 2015 confirmed that all federal student aid has been indefinitely suspended to that campus due to a long history of foul play on the part of Webster University : St. Louis (parent campus).

Update 7/3/2015: Webster’s student-run newspaper, The Journal, has once again copied our story (and Scribd docs) without crediting CollegeTimes, continuing to function in more of a manipulative PR role than a voice for students. The Journal and St. Louis-based Post-Dispatch both published peculiarly favorable coverage of our March 2015 exclusive investigation into fraud and corruption at Webster’s Thailand campus as well.

The report, although dated January 15, 2015, was released just a few weeks ago on the DOE’s Student Aid website under the rather inexpressive title “Final Program Review Determination.” The public report – prepared by the DOE’s Student Participation Division based in Kansas City, Missouri – was published as the result of an apparent “off-site program review at (Webster) the week of August 6, 2014” carried out by DOE representatives Bridget Johnston and Jenny Armontrout:

The focus of the review was Webster’s compliance with federal requirements, specifically in regards to its arrangements and agreements with foreign institutions that are not Title IV _eligible. The review Consisted of an examination of Webster’s agreements with foreign institutions that are not Title IV eligible, and disbursement records for students who enrolled in programs provided by the ineligible institutions. A program review report was issued September 11, 2014.

The report’s publication comes on the heels of exclusive CollegeTimes investigations into massive fraud and corruption being carried out at Webster campuses in Thailand and London that received widespread attention across the web.

Flagrant Disregard For Federal Guidelines

Citing U.S. federal guidelines on student aid disbursement, the DOE report’s key (single) finding is that Webster’s campus in London was – and in fact, always has been – ineligible for U.S. student aid due to its illegal arrangement with Regent’s University London:

Citation Summary: A Program Participation Agreement (PPA) conditions the initial andcontinued participation in of an eligible institution in any Title IV, HEA program upon compliance with the provisions of regulations set forth in 34 C.F.R Part 668, the individual program regulations, and any additional conditions specified in the PPA that the Secretaryrequires the institution to meet. 34 C.F.R § 668.14(a)

Noncompliance Summary: The Department obtained a signed copy of an agreement Webster entered into in 2012 with Regent ’s University (Regent ’s), an institution headquartered in theUK, to administer educational programs at the Regent ‘s campus in London. At the time,Regent’s had no authority from the Department to receive or disburse Title IV, HEA program funds. Regent’s had not been determined to be an eligible institution, has not signed a Program Participation Agreement with the Department and has not obligated itself to act as a fiduciarywith respect to its receipt or disposition of federal funds. After reviewing the agreement with Regent ‘s, the Department determined that the programs offered by Regent’s on behalf of Webster were ineligible programs because the Agreement violated the Department’s rules under 34 CFR. §668.5(c) regarding written arrangements with ineligible institutions. As a result of this violation, Webster had permitted an ineligible institution to improperly receive Title IV, HEA program funds and provide a program to Title IV recipients

Interestingly, the report confirms that the DOE notified Webster in writing on July 18, 2014 “to immediately cease from awarding any Title IV, HEA program funds to students enrolled in programs administered through the Agreement with Regent’s [University London].” Such a timeline supports controversial claims by Webster London students who claim they were the victims of fraud during the Fall 2014 recruitment period, alleging that Webster purposefully hid the fact that all federal aid had been canceled as they continued to recruit dozens of new students to the London campus.

Let Off With Just A Slap On The Wrist?

To make matters worse, the DOE found that Webster was committing the same fraud at their campuses in China, but apparently chose not to cite them for it:

During the review, the Department was also informed that Webster has entered into agreements with Chinese institutions that implicate the same issue as the Agreement with Regent’s, although responsibilities attendant to Title IV, HEA program funding do not appear to be referenced in these contracts. Required Action Summary: Webster was directed to demonstrate that it put in place controls to ensure that no Webster students enrolled in programs administered through the agreements with Chinese institutions receive Title IV, HEA program funding.

In addition, despite the report acknowledging that Webster’s illegal relationship with Regent’s had been in existence since 1994, with the contract being renewed both in 2006 and again in 2012, the DOE team apparently decided to only hold Webster accountable for student aid funds disbursed post-2012 for unspecified reasons (the report’s wording is so vague, in fact, that an exact timeline is hard to distinguish).

Not only so, but the DOE team apparently took at face value Webster’s claim of applying only $87,869.00 in Pell Grants and $2,345,821.00 in Direct Loan funds to their London campus post-2012. Final “penalties” as assessed by the DOE are below:

  • $87,869.00 (Pell Grants)
  • $1,024.00 (interest on Pell Grants)
  • $6,571.00 (estimated DOE “losses” based on $2,345,821.00 Direct Loans)

TOTAL: a mere $95,464.00 (due “within 45 days” by mailed check)

The Regent’s campus has been aggressively trying to achieve its own Title IV recognition by the U.S. Department of Education in order to accept more American study-abroad students, which it recently was able to accomplish with the notable exception of the American College section it runs alongside Webster University. The two schools announced earlier in 2015 that they would be severing their relationship, and that the Webster-Regents program would be cancelled before the end of 2016.

Author’s Note: Webster University appears to have successfully siphoned millions of dollars of U.S. taxpayer money into their pockets by committing over 20+ years of fraud at their London campus. Ultimately, it would seem this case once again proves that it’s definitely “worth it” for American colleges (both non-profit and for-profit) to commit fraud; from a business standpoint, the risk of legitimate consequences is so minute and the U.S. DOE and DOJ appear so unwilling to get involved that rampant fraud and corruption rages forward across the landscape of American higher education.

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2 thoughts on "Department Of Education Report Cancels Student Aid, Confirms Foul Play At Webster University Campus"

  1. Chakri says:

    Informative article . Thank you for sharing your valuable knowledge.

  2. I can’t believe how some institutions can take advantage of something that is necessary for many students to even attend an institution like this in the first place. It really ruins it for everyone else.

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